Essar Group sells all onland rigs to raise cash

Vol 6, PW 20 (04 Dec 02) News in Brief

Under pressure from financial institutions, the Essar Group has sold all its onland drilling rigs to raise money for its stricken 10.5m t/y refinery at Vadinar.

A source tells this report Essar signed a contract with the Bin-Jaber Group of Abu Dhabi to sell the 12 rigs in September, with a condition that the final payment would be made by 15th November. Eight rigs were on contract to the Oman national oil company, Petroleum Development Oman, and four to Qatar Petroleum.

The rigs were sold with the 'running contracts'. It's believed Essar receiveda little over $65m from the deal.

Six months ago KPMG valued the Essar rigs at Rs400cr ($83m). "Essar is now busy winding up its upstream drilling company," says our source.

Indian financial institutions have been asking Essar to sell its rigs to raise cash for its stricken refinery project.